August 27, 2025, Newsletter

Dear Friends,

Tangents:
August 27, 1859: Edwin L. Drake drilled the first successful U.S. oil well near Titusville, Pa.
August 27, 1897: Henry Timken and Reginald Heizelman file a patent for the tapered roller bearing – a lasting innovation in mechanical design found in vehicles, conveyors and heavy machinery.

August 27, 1979: Lord Mountbatten assassinated.

Georg W.F. Hegel, philosopher, b. 1770.
Mother Teresa, saint, b. 1910.
Peewee Herman, actor, b. 1952.

We have liftoff!
After a string of mishaps, SpaceX launched the 10th test flight of its Starship spacecraft and Super Heavy rocket booster on Tuesday night.

Astronomers spot new type of supernova
Just before exploding, one star did something super unusual.

New study suggests how to prevent type 2 diabetes
The method worked for overweight to severely obese people between the ages of 55 and 75.

‘The Thursday Murder Club’ is on the case
The all-star cast of senior sleuths is ready to solve some murder mysteries on the big screen.

In Turkey, coffee can come with a side of destiny 
Who needs tea leaves when you can use coffee grounds to see the future?

100: That’s what you get when you take pop star Taylor Swift’s favorite number (13) and add it to football player Travis Kelce’s jersey number (87). Swift brought up numerology during her recent appearance on the “New Heights” podcast. The two are now 100% engaged. 

Scientists don’t know much about the rare bumblebee catfish, native to the rivers of Brazil. One research team was lucky enough to observe thousands of them climbing to scale a waterfall, probably to find opportunities to mate. Read More.

A new study shows that DNA forms coils under stress, not the tangled knots that scientists expected. Read More.

Japan’s first entirely homegrown quantum computer uses superconducting qubits and components made entirely domestically. Read More.

PHOTOS OF THE DAY

Kathmandu, Nepal
A devotee pays homage to Lord Shiva at the Pashupatinath temple
Photograph: Narendra Shrestha/EPA

Boyacá, Colombia
Women in traditional costume take part in a football match
Photograph: Luis Acosta/AFP/Getty Images

Buşteni, Romania
People gather at the Heroes Cross in the Bucegi mountains to watch an airshow
Photograph: Vadim Ghirdă/AP
Market Closes for Aug 27^th,2025

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Forecasting our futures is built into our psyches because we will soon have to manage that future. -Dr. Alan Greenspan, b. 1926.
Canada
By Bloomberg Automation
(Bloomberg) — The S&P/TSX Composite rose for the second day, climbing 0.3%, or 93.12 to 28,433.00 in Toronto.
Royal Bank of Canada contributed the most to the index gain and had the largest move, increasing 5.1%.
Today, 123 of 211 shares rose, while 86 fell; 7 of 11 sectors were higher, led by financials stocks.
Insights
* This month, the index rose 4.3%
* The index advanced 22% in the past 52 weeks. The MSCI AC Americas Index gained 16% in the same period
* The S&P/TSX Composite is at its 52-week high and 27.9% above its low on April 7, 2025
* The S&P/TSX Composite is up 2% in the past 5 days and rose 3.4% in the past 30 days
* S&P/TSX Composite is trading at a price-to-earnings ratio of 20.2 on a trailing basis and 17.9 times estimated earnings of its members for the coming year
* The index’s dividend yield is 2.5% on a trailing 12-month basis
* S&P/TSX Composite’s members have a total market capitalization of C$4.55t
* 30-day price volatility little changed to 10.01% compared with 10.01% in the previous session and the average of 9.09% over the past month
Index Points
Financials | 100.6969| 1.1| 14/10
Energy | 27.7121| 0.6| 31/8
Consumer Staples | 4.8510| 0.5| 7/3
Communication Services | 3.1321| 0.5| 4/1
Real Estate | 2.7606| 0.5| 16/3
Industrials | 1.9656| 0.1| 13/15
Health Care | 0.7386| 1.1| 3/0
Utilities | -1.6603| -0.2| 8/6
Information Technology | -6.6641| -0.2| 8/2
Consumer Discretionary | -14.3719| -1.5| 3/6
Materials | -26.0416| -0.6| 16/32
RBC | 95.8300| 5.1| 138.5| 15.4
Canadian Natural Resources | 14.6600| 2.4| 84.7| -2.7
CIBC | 11.4500| 1.7| 165.1| 14.2
Dollarama | -13.5800| -3.6| 203.1| 31.9
Shopify | -15.6000| -0.9| -34.8| 26.2
National Bank of Canada | -15.6100| -3.8| 296.7| 10.4
(MT Newswires):
The Toronto Stock Exchange posted a second-straight record close on Wednesday, its fourth in the last five sessions and the eighth in August, even as Canada’s big banks while reporting earnings increases for the third quarter, are also flagging some issues with provisions for credit losses (PCL).
Buoyed by higher commodity prices, the resources-heavy S&P/TSX Composite Index closed up 93.12 points, or 0.33%, at 28,433.0, with most sectors higher, led by Energy, up 1.5%, Financials, up 1.1%, and Health Care, up 1%.
Base Metals was down about 0.7% and Utilities down near 0.2%.
The financials sector was boosted by Royal Bank of Canada (RY.TO), was up 5% today to $200.07 level and up 28% over the last 12 months after it reported higher earnings for the third quarter, reflecting “strong growth” across each of its business segments.” But its consolidated results reflected an increase in total PCL of $222 million from a year ago.
National Bank (NA.TO) fell 3.8% to $144.71 after it reported mixed earnings in the third quarter as it continues to integrate the Canadian Western Bank acquisition and as provisions for credit losses rose.
PCLs rose $55 million year over year, mainly due to the provisions for credit losses on impaired loans.
Big bank earnings season continues Thursday with CIBC (CM.TO, CMO) at 5.30 a.m. eastern time and then TD Bank (TD.TO, TD) at 6 a.m.
For CIBC, National Bank in a preview note published earlier this month forecast cash EPS of $1.90 compared to a consensus $2.00.
Key themes National will be keeping an eye on with CIBC include: that no “catch up” provisioning is expected, or required; that the P&C banking segment continues to outperform peers; and a likely renewal of its buyback.
With TD, National forecast cash EPS of $2.07 versus a consensus $2.05.
National will be keeping an eye out for: whether TD’s Canadian P&C segments remains a “laggard”; the U.S. P&C NIM benefits from balance sheet positioning; and whether TD’s buyback pace has slowed.
On CIBC, National Bank noted the bank was a standout during Q2 in that its 10 bps performing PCL ratio was around 40% below the peer average of 17 bps.
But it said context is important, and noted the bank recorded a 9 bps performing PCL ratio during Q1 2025, nearly double the peer average.
Moreover, it added, the bank’s 62 bps performing ACL ratio represents 2.0x trailing four quarter impaired loan losses (vs. 1.6x peer average).
As such, National does not believe CM will need any “catch-up” provisioning to make up for last quarter’s deviation versus peers.
National noted an important driver of CIBC’s stock performance has been the strength of its Canadian P&C segment at a time of growth concerns facing the domestic banking industry.
CIBC’s P&C segment has delivered 11% PTPP growth this year, including 12% during Q2 2025, easily outpacing the group.
CM has delivered this outperformance despite loan growth of only 3% Y/Y in the first half of 2025.
National Bank said the key drivers have been “stellar” NIM performance (+11 bps Y/Y in H1/25) as well as “disciplined” expense management (+3% YTD operating leverage).
According to SEDI filings, CIBC repurchased 5.5-million shares during the quarter, bringing its total repurchases to 20-million shares.
This figure represents all of CIBC’s buyback program capacity, which expires on September 9.
National noted the bank’s Q2 2025 CET 1 ratio of 13.4% is above its minimum target range of 12.75%-13% (i.e., the base level assumption behind its 15%+ medium-term ROE objective).
“Given this excess capital position, and the de-intensification of the domestic regulatory environment, (CIBC) could easily accommodate a larger buyback program.  However, the bank will most likely renew the standard 2% program, especially if it has an expectation of stronger organic growth prospects in the year ahead.”
National Bank noted TD’s Investor Day, to be held on September 29, will provide an updated overview of the bank’s future growth strategy and said a key question for investors revolves around what TD’s future EPS growth could be, considering the headwinds imposed by the U.S. asset cap. The Canadian P&C segment is a key component of TD’s future growth potential, and investors expect an “accelerated” growth strategy from this business, National added.
National noted delivering “accelerated” growth is easier said than done, with TD’s historical track record having exhibited lagging performance.
And that laggard status has persisted in 2025, with the Canadian P&C segment having delivered 4% PTPP growth during H1/25 versus a 7% peer average, including 2% during Q2/25. compared to a 6% peer average.
In the wake of the imposition of the asset cap, National Bank noted TD’s U.S.
P&C segment is in the midst of its transition year and an important component of this period involves the disposition of up to US$50 billion of low-yielding securities.
The strategy comes with an upfront cost of US$1.5 billion of crystallized losses, including losses on other asset dispositions, offset by higher asset yields over time.
As a result, TD’s U.S. NIM is expanding rapidly this year, up 27 bps from fiscal Q4 2024 levels.
The U.S. Call Reports indicate another period of accelerated NIM expansion.
National is forecasting 13 bps of Q/Q NIM expansion, bringing segment NIM to 3.17%.
Another aspect of the balance sheet restructuring involves the disposition of what National Bank expects to be near US$30 billion of loans.
National Bank estimates that TD will have completed roughly 50% of this plan by Q3 2025.
Following the sale of its 10% stake in Charles Schwab, National noted, TD implemented a near $8-billion buyback program for up to 100-million shares.
The bank repurchased 15.5=million shares during Q3 2025, down from the 30 million of repurchases during Q2 2025.
While National expects TD will fulfill its buyback commitment, it said the stock’s 30%-plus rise this year will reduce the amount of shares repurchased.
Based on the current stock price, National estimates that TD will repurchase around 40-million additional shares, near 2% of outstanding shares, to fulfill its $8 billion buyback commitment.
If completed, the total buyback would amount to nearly 5% of TD’s shares outstanding.
Of commodities, gold moved higher late afternoon Wednesday as the dollar gave up early gains amid concerns over U.S. President Donald Trump’s move to take control of the Federal Reserve board, which continues to prompt safe-haven buying.
Gold for December delivery was last seen up $116.10 to US$3,449.10, falling off the highest since August 8.
Also, West Texas Intermediate crude oil closed higher after the United States placed hefty secondary tariffs on India to discourage its imports of Russian oil even as a report showed a larger than expected drop in U.S. oil inventories last week.
WTI crude for October delivery closed up $0.90 to settle at US$64.15. per barrel, while October Brent crude was last seen up $0.75 to US$67.97.
US
By Rita Nazareth
(Bloomberg) — Stocks fell in late hours after Nvidia Corp. results disappointed traders hoping for more from the chipmaker at the forefront of the artificial-intelligence boom that has powered the bull market.
A $660 billion exchange-traded fund tracking the S&P 500 dropped after the close of regular trading.
The world’s most- valuable chipmaker tumbled after giving a tepid revenue forecast, fueling concerns that a massive run-up in artificial intelligence spending is slowing.
Sales will be roughly $54 billion in the fiscal third quarter, which runs through October.
Though that was in line with the average Wall Street estimate, some analysts had projected more than $60 billion.
The forecast excluded data center revenue from China.
For a stock priced for perfection, that was enough to trigger the slide in the shares.
Nvidia has added about $2 trillion in market value since early April to trade near a record on optimism around the AI boom.
In regular hours, the S&P 500 saw mild gains, but closed at a fresh record.
Short-dated Treasuries continued to climb amid bets on Federal Reserve policy easing.
The 30-year yield was flat, following the recent announcement by President Donald Trump that he was firing Fed Governor Lisa Cook amid allegations of mortgage fraud.
His top economic adviser Kevin Hassett said Cook should go on leave while her status on the board is being litigated.

Corporate Highlights:
* Boeing Co. has expressed confidence to Ryanair Holdings Plc that it will be able to raise 737 production rates by the end of October, the Irish airline’s chief executive officer said.
* HP Inc. gave a profit outlook for the current quarter that may beat expectations, showing firming demand for computers and interest in new machines that can run the latest AI software.
* CrowdStrike Holdings Inc. projected sales for the current quarter that narrowly missed analysts’ estimates, as the cybersecurity company seeks to move past the costs of the global computer outage it triggered last year.
* Cracker Barrel Old Country Store Inc. said it’s getting rid of a new logo that had sparked controversy and prompted a slump in its share price.
* On the back of the American Eagle Outfitters Inc. Sydney Sweeney buzz, the company has nabbed Travis Kelce as its newest face.
* Abercrombie & Fitch Co. raised its full-year sales guidance following a stronger-than-expected quarter at the teen-focused Hollister brand.
* Kohl’s Corp. offered a more optimistic full-year sales outlook, the latest indication that consumer spending hasn’t yet run out of steam.
* Peanut butter and jelly maker JM Smucker Co. reported that first-quarter net sales were weighed down by decreased sales of coffee, dog snacks, sweet baked goods and fruit spreads.
* Williams-Sonoma Inc. raised its full-year sales growth target as a strong second-quarter showing across all brands kept concerns of increased tariffs on imported furniture at bay.
* PayPal Holdings Inc. said a recent service disruption was to blame for irregularities experienced by several German banks.
* Royal Bank of Canada topped estimates on strong performance across its biggest businesses and as the firm set aside less money than expected to cover possible loan losses, a rebound from notable misses on credit earlier this year.
* National Bank of Canada’s earnings came up just short of estimates as its capital-markets business failed to match analysts’ forecasts for a unit that’s benefited from market volatility around this year’s tariff chaos.
* Cambricon Technologies Corp. swung to a record profit in the first half, reflecting a wave of demand for Chinese chips after Beijing encouraged the use of homegrown technology in a post- DeepSeek AI boom.

Some of the main moves in markets:
Stocks
* The S&P 500 rose 0.2% as of 4 p.m. New York time
* The Nasdaq 100 rose 0.2%
* The Dow Jones Industrial Average rose 0.3%
* The MSCI World Index rose 0.2%
* Bloomberg Magnificent 7 Total Return Index was little changed
* The Russell 2000 Index rose 0.7%
* Nvidia fell 0.1%
Currencies
* The Bloomberg Dollar Spot Index was little changed
* The euro was little changed at $1.1634
* The British pound rose 0.1% to $1.3498
* The Japanese yen was little changed at 147.48 per dollar
Cryptocurrencies
* Bitcoin rose 0.7% to $112,101.04
* Ether fell 0.5% to $4,566.62
Bonds
* The yield on 10-year Treasuries declined three basis points to 4.24%
* Germany’s 10-year yield declined two basis points to 2.70%
* Britain’s 10-year yield was little changed at 4.74%
* The yield on 2-year Treasuries declined six basis points to 3.62%
* The yield on 30-year Treasuries was little changed at 4.91%
Commodities
* West Texas Intermediate crude rose 1% to $63.88 a barrel
* Spot gold was little changed

Have a lovely evening.

Be magnificent!

As ever,

Carolann
There is no way to happiness, happiness is the way. –Thich Nhat Hanh, 1926-2022.

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Senior Investment Advisor

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801 (Text Only)
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com